Citing cost drop, U.S. government shifts focus of solar funding

(Reuters) - The cost of solar energy has hit a U.S. government target three years ahead of schedule, prompting the Energy Department to change the focus of its solar program to integrating higher levels of the renewable power technology with the power grid.

The DOE’s SunShot Initiative, launched in 2011 by the administration of President Barack Obama, set a goal of reducing the price of utility-scale solar to 6 cents per kilowatt-hour by 2020. The cost at that time was about 28 cents per kwh. On Tuesday, DOE officials said its target has been met, largely due to a sharp drop in the cost of solar panels.

Residential and commercial solar are about 90 percent of the way toward meeting their cost reduction targets.

The next phase of the SunShot program will align research and development efforts with Secretary of Energy Rick Perry’s priorities of grid reliability and resilience, DOE said. Last month, a long-awaited report commissioned by Perry blamed cheap natural gas for the closure of baseload coal and nuclear plants, a trend it said was threatening grid reliability.

New funding efforts aim to make solar, which depends on the sun’s rays to generate power, more reliable. The DOE said it will provide up to $62 million to support advances in concentrating solar power that can be stored or used in other applications when the sun is not shining. It will also spend up to $20 million to fund early-stage projects to advance electronics such as solar inverters that can help solar arrays communicate with the electric grid.

“We will drive early-stage research to help make solar more of an on-demand energy resource, and less of a weather-dependent one,” Daniel Simmons, acting assistant secretary for the DOE’s Office of Energy Efficiency & Renewable Energy, said in a speech at the solar industry’s annual trade show in Las Vegas.